Need to Know: Allowances and Teens


in Kids and Money

When it comes to teens and their allowances parents know that they must tread softly. To teens, the ability to buy what is fashionable, fun and entertaining is almost defining to their personality &#40or at least what they want to project as their personality&#41. Teenage years are definitely challenging as teens are often faced with very adult type decisions. Teens are no longer children but not yet experienced, mature or responsible enough to be considered an adult. An allowance is a way to allow your child to feel more independent, while at the same time teaching skills that they will need to know once they must fend for themselves in the real world.

Allowances are designed to be just that, a monetary amount that you "allow" your teen to be responsible for. It is up to your teen to decide how they will treat the money that they are given. Likewise it is the responsibility of the parent to determine the age, situation and amount of the allowance that is appropriate for each child.

When to start giving your teen an allowance

Some parents begin giving their children allowances as soon as they are old enough to begin asking for things. Other parents will never give their child an allowance. Experts suggest that if you decide to start giving your teen an allowance you should consider their ability to mathematically understand the implications of saving and spending as well as their ability to show control against impulse buying. Ideally an allowance is a good way to put your teen through a trial run of what managing their finances will be like when they turn sixteen and are free to go out and get a job of their own.

Deciding how much to give your teen for an allowance

The amount of the allowance you decide to give your teen will generally depend on several factors. The first is your family&#39s ability to finance the additional cost of giving an allowance. Obviously your family should not break the bank to give your teen an allowance. Likewise your teen&#39s allowance should not be such an amount that would make even you as the parents envious. The amount that a teen needs for his or her allowance should be based first on their needs or expenses for which they are personally responsible, and then a small bit extra should be for any other non&#45necessary purchases &#40such as entertainment, extra clothes, eating out with friends, etc.&#41 Once your child is old enough to get a job, an allowance should be reconsidered or eliminated completely.

Having a clearly understood allowance method

Allowances work out best when there is a clearly delineated work and reward schedule associated with them. Teens should know exactly what is expected of them and what extra chores there are to be done so that they can earn their allowance. Having no incentive, but rather to be simply handed an allowance, defeats any purpose of having it in order to teach your child about money management in the first place. Teens should be expected to contribute to their home and school work without expectation of monetary reward. Monetary rewards work best when they are first dependent on living up to family expectations and then given incrementally depending on the amount of work that they have done that goes above and beyond what was expected of them. Teens need to understand that an allowance is not a right or an entitlement to receive payment every so often. Parents have the power to give and take the allowance away if the conditions of previously agreed upon terms are not met. This is how a teen can effectively learn about real&#45world work expectations and therefore be better prepared for more adult responsibilities.

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